Question about internet sharing..

I am not sure if this is the right place to post this thread I'm new here. Anyway here it goes. Back before we had our airport extreme. We served all the computers in our house via an e-mac. I am not sure exactly how we did this all I know is that the internet went from the modem to the e-mac and then to my pc (at the time, now I have a macbook pro). My question is how do I serve the internet without a router (or set my book to be the server/ router). That is how we used the e-mac before the extreme. What I am trying to do is set my book up to receive the internet through ethernet and distribute it via my airport; so that I can use my ipod touch while I am away from home as I cannot use the extreme because it's not mine to take with me. I have set up a local area network ( I think thats what I have done). My Ipod touch acknowledges the network name and the password registers so I know they are connected. However I cannot use the internet on my Ipod touch, what am or have I done wrong? Thank you to anyone who can help me it would be much appreciated.

Does anyone know anything on this or perhaps can direct me to some where I can get the info I seek

I have done this and my computer is showing as a wifi hotspot network server or whatever but my ipod touch when connected wont do anything on the internet but does recognize that its connected via wifi to my computer? what do i do